A few notes from the AA 2014 Shareholders Meeting Updated On: Jun 05, 2014
Notes from the AA 2014 Shareholders meeting provided by Local 591 member Santos. Agenda also attached.
Santos (who went on his own time) covered it pretty well.
Doug Parker opens 2014 shareholders meeting announcing the merger between US Air and American is complete. Introduces the board of directors and thanks Tom Horton (who was not present) for his service during the merger.
Ray Rogers, a famous Labor activist, had his first of many interruptions at this point. Rogers quoted Judge Kendall by stating "If you would look up bad labor relations in the dictionary, you would have an American Airlines logo besides it." He added that in 2012 Parker made $18 million, Horton $19 million, and Garton $10 million. Yet, Envoy pilots were offered a contract which started them at $23,000 and capped at $38,000. They've had no raises since 2004.
Parker rebutted that AA needed competitive costs with others and commuters were safe.
Rogers snapped back saying that AA should be called McDonalds Air. Pointing to Parker, he said "you have not justified that salary and what you are doing to the American public."
Gail Dunham, a retiree, spoke to the board of directors saying they would not be happy if they lost their travel benefits.
After Parker read the proposal to appoint KPMG as the independent accounting firm, Rogers protested again, calling them crooks. KPMG is slightly better than Ernst & Young, but still collects huge sums for fraud and criminal activities and creating tax havens. Rogers said AA should be using smaller auditors.
Parker announced integration is going well. The combined AA/US Air is #1 in the East, #1 in the middle of the country, and #3 in the West Coast. He touted the $340 million made in the 1st quarter.
While Parker spoke about service he was interrupted by an unidentified speaker in the audience, who mentioned that he pays for more legroom but repeatedly is denied the seat. "It is a contract and it should be provided." Parker replied, "if you paid for it, you deserve it."
Parker continued with the company performance citing the 500 airplanes on order; 83 will be delivered this year, 76 next year. The stock has risen 64% since its inception.
The CEO outlined the plan for moving forward:
1-Focus on customers
2-Be an industry leader
3-Engage our team members "compensate them well," Parker said.
4-Provide a return for our investors
5-Look to the future
Parker opened up questions from the audience and Rogers once again grabbed the microphone. He criticized the company for taking away flight benefits from retirees. He chided the board of directors for their free travel on AA; "you can not afford to buy tickets?" Then went on a marvelous tirade which ended with Rogers saying, "the board rubber stamps greed."
Gail Dunham again spoke on the loss of travel benefits saying retirees will fly standby after foreign exchange students. She also added that all the friends of the D2s which have immediate travel benefits will be a security risk.
Parker said the blending of 2 different travel programs was difficult. AA had a 1st come 1st served while US used seniority. AA was the only airline to prioritize the retirees equally with active employees. "No possible way to make everybody happy." US Air workers have similar complaints about giving up the seniority for travel.
Don Smith and Carol Ryker also spoke about the retirees demotion on the travel benefits.
An investor asked when will AA see the $1 billion in savings promised in the merger. Parker remarked savings will exceed $1.5 billion. That target might have been reached, but $500 million was spent on raising Labor costs.
Bob Owens, Local 591 Treasurer, then rose and refuted AA president Scott Kirby's comments in the media regarding improved Labor relations. Owens said the Labor relations were horrible, and couldn't improve since we were "worst in the industry." He recommended "throwing some of that $500 million our way." He also commented on the prolonged contract talks with the IAM, and the possibility they might strike.
Parker answered that Kirby's comments were taken out of context, and admitted the company had a lot a work to do on Labor relations. In regards to the IAM contract, the CEO said both sides have been negotiating and the NMB hasn't declared an impasse.
Owens quipped that the NMB makes political decisions.
Parker tiring of Owens dogged cross examination stated he didn't speak for the IAM.
After fielding one more inquiry from the audience (a supportive business man irked by Ray Rogers blasts), Parker closed the shareholders meeting claiming the board of directors had to leave. This as shareholders still had questions, including TWU members.
Webcast link-
http://edge.media-server.com/m/p/5qanysbb/lan/en
Download:
AA Anual Meeting of Stockholders agenda 2014.pdf